Rail Debt Costs Surge as Li Steps Up Investment: China Credit.
Borrowing costs for China's state-owned railway company are rising the
fastest in two years just as Premier Li Keqiang vows to accelerate
network expansion in an economy set to grow at the slowest pace in 12
years. The yield on 10-year rail debt surged 23 basis points last month
to 5.32% in Shanghai, the biggest increase since August 2011, ChinaBond
data show. The rate on similar-maturity government bonds climbed 21
basis points to 3.73%.

Germany’s Retail Sales Unexpectedly Declined in June.
German retail sales (GRFRIAMM) unexpectedly declined in June,
suggesting that doubts about Europe’s economic recovery weighed on
consumer spending. Sales adjusted for inflation and seasonal swings
dropped 1.5 percent from May, when they rose 0.7 percent, the Federal
Statistics Office in Wiesbaden said today. Economists predicted an
increase of 0.2 percent, according to the median of 25 estimates in a
Bloomberg News survey. Sales fell 2.8 percent from a year earlier.

German Jobless Holds Near Low as Euro Region at Record: Economy. Germany’s unemployment rate held near a two-decade
low, potentially buoying support for the government before September
elections, while the rate in the euro area stayed at a record high. The
number of people out of work in Germany decreased by a seasonally
adjusted 7,000 to 2.93 million in July and the adjusted jobless rate was
unchanged at 6.8 percent, according to the Nuremberg-based Federal Labor Agency today. The
rate in the 17-nation euro area was 12.1 percent in June, unchanged
from a revised figure for May, the European Union’s statistics office
said in Luxembourg.

European Stocks Are Little Changed After U.S. GDP Report.
European stocks were little changed, with the Stoxx Europe 600 Index
completing its biggest monthly gain since October 2011, as a report
showed the U.S. economy expanded at a faster-than-expected pace.
Anheuser-Busch InBev NV jumped 6.9 percent after the maker
of Stella Artois lager posted earnings that beat estimates.
Invensys Plc added 1.1 percent after Schneider Electric SA
agreed to buy the company for 3.4 billion pounds ($5.2 billion). The Stoxx Europe 600 Index added 0.1 percent to 299.58 at
the close of trading London, after earlier climbing as much as
0.4 percent and dropping as much as 0.5 percent.

Fed Keeps $85 Billion QE Pace, Sees Risk of Disinflation.
The Federal Reserve said it will maintain its $85 billion in monthly
bond purchases and persistently low inflation could hamper the economic
expansion. “The committee recognizes that inflation persistently
below its 2
percent objective could pose risks to economic performance, but it
anticipates that inflation will move back toward its objective over the
medium term,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. Chairman
Ben S. Bernanke and his colleagues are debating when employment gains
will be sufficient to warrant tapering bond buying that has swelled the
Fed’s balance sheet to a record $3.57 trillion. Some policy makers have
said
the purchases, aimed at fueling growth and reducing 7.6 percent
unemployment, risk creating asset-price bubbles. The statement
contained no new language on the conditions for maintaining the current
pace of asset purchases. The Fed repeated the pledge it has used since
September that it will continue the purchases until the U.S. labor
market outlook has improved substantially.

Commodity-Linked Structured Note Sales Slump to Nine-Year Low. Banks
are selling the least
structured notes tied to commodities in nine years as investors shun the
securities amid a slowdown in China’s economy and the prospect of the
U.S. Federal Reserve winding down stimulus. Global issuance in the first half of the year fell to about
$2 billion, 41 percent lower than the same period of 2012 and
the least since 2004 with securities linked to oil and gold
among the biggest losers, according to a report from Barclays
Plc. In the U.S., banks sold $689.6 million of the securities in
the same period, the lowest since at least 2010, and have added
$70.9 million this month through July 30, according to data
compiled by Bloomberg.

Crude Heads for Best Month Since August on U.S. GDP. WTI for September delivery rose $1.51, or 1.5 percent, to $104.59 a barrel at 1:57 p.m. on the New York Mercantile Exchange.
Futures traded at $103.57 before the supply report. The volume of all
futures traded was 4.7 percent below the 100-day average for the time of
day. Prices have climbed about 8.3
percent this month.

Fed’s Debit-Card Swipe-Fee Rules Rejected by U.S. Judge. The
Federal Reserve disregarded the Congress’s intent in deciding how much
banks can charge merchants for debit-card transactions, a judge ruled,
handing a victory to retailers who challenged the fees as being too high. U.S. District Judge Richard Leon in Washington ruled today that the Fed considered data it wasn’t allowed to use in setting
a 21-cent cap on debit-card transaction fees under the Dodd-Frank law. Leon said the rule, in effect since October 2011,
would remain in place until the Fed drafts new regulations or
interim standards.

Kids’ IPhone Hopes Dashed as Americans Pare School Spending. U.S. households are planning to shell out an average of 7.8 percent
less for this year’s back-to-school shopping season because of the bumpy
economic recovery, the National Retail Federation says. The potentially
lackluster spending is one more signal that consumers are conflicted
about the strength of the recovery and the stability of their buying
power. That means retailers will have to keep prices low and offer
exclusive products to fare well during the important back-to-school
season, second only in importance to the year-end holiday season. Total
back-to-school spending may total $26.7 billion this year, the
Washington-based NRF said July 18. That translates to an average of
about $634.78 on apparel, shoes, supplies and electronics for parents
with school-age children, down from $688.62 last year, the group said. “There
is no question that the economy still has a tight grip on Americans’
spending decisions,” NRF Chief Executive Officer Matthew Shay said on a
conference call. “People are finding ways to get by.”

Obama Calls Summers Criticism Unfair. President Barack Obama told House Democrats that former
Treasury Secretary Larry Summers -- a potential candidate for Federal
Reserve chairman -- is being unfairly criticized, lawmakers said after a
private meeting with the president. “He took a minute to stand
up for Larry Summers,” said Representative Brad Sherman of California.
Obama told Democrats he hadn’t made a decision about whom to appoint as
Fed chairman though he said Summers was being unfairly criticized,
Sherman said today. Representative John Larson, a Connecticut
Democrat, said the president “hasn’t begun the process but he was, I
thought, very adamant in his defense of the service Larry Summers has
provided.” Representative John Lewis of Georgia said the
president “was very defensive, I would say, of Summers and saying that
Summers had played a very critical role early in the administration.”

SodaStream(SODA) Rallies Most Since May After Raising Outlook.
SodaStream International Ltd. (SODA), the Israeli maker of home soda
machines, surged the most in 11 weeks after boosting its revenue outlook
for 2013 and reporting second-quarter earnings that beat analysts’
estimates. Shares of the Airport City, Israel-based company jumped 15 percent to $67.10 at 10:08 a.m. in New York. The advance pared the stock’s retreat in July to 8 percent, the biggest slump
since October.

Fox News:

US not into electric cars, but feds gave company $100M for charging stations, watchdog says. A California company was given more than $100 million in taxpayer
funds by the federal government – with few strings attached – to
establish a network of electric car charging stations that is fraught
with problems, according to a government audit. All this, despite weak demand by the American public for electric cars. While President Obama has pledged to get 1 million electric cars on
U.S. roads by 2015, a new report by the Department of Energy’s inspector
general found that Americans’ aversion to electric vehicles and loose
department supervision led to stalling the charging network – which cost
taxpayers more than $135 million.

Soros takes large Herbalife(HLF) stake, shares spike.
The hedge fund battle over Herbalife intensified on Wednesday as George
Soros has taken a large long position in the nutritional
supplements maker, according to sources. Soros' position in Herbalife is one of his top three holdings, sources said.

Company pensions in peril as shortfalls hit record. Young workers may want to start counting on something other than company pensions to fund their retirements. It turns out that the plans of S&P 500 companies are underfunded
to the tune of $451.7 billion, a number that has grown some 27 percent
in just the last year alone, according to data released Wednesday by
S&P Dow Jones Indices. While firms have plenty of cash to
cover older workers currently on the payroll or in pension plans, that
may not be the same once the younger generation gets ready to stop
working.

New Siemens Chief Sees Weakness in China. The newly named chief executive of Siemens has promised to restore
stability to the company that symbolizes German engineering and
electronics prowess. But he also issued a warning that could bode ill
for the euro zone economy: Don’t count on China.

Brazil cenbank intervenes 3 times as real hits 4-yr low. Brazil's central bank
intervened three times in the foreign exchange market on
Wednesday as it tried to halt a currency slide that took the
real to its weakest level in over four years, potentially adding
to inflation pressures. The interventions came right after the real
slid to as much as 2.3022 per dollar, its weakest since April 1,
2009, suggesting that policymakers are ready to put up a fight
to stop the currency from weakening past the
psychologically-relevant mark of 2.3 per dollar.

China Stocks World’s Worst Losing $748 Billion on Slump. Four
years after China’s growth helped lead the global economy out of a
recession and won the admiration of luminaries from billionaire George
Soros to Nobel laureate Joseph Stiglitz, the nation’s stock market has
lost more money for investors than any other in the world. The Shanghai
Composite Index (SHCOMP), which doubled in 10 months through August 2009
as the government poured $652 billion of stimulus into building roads,
railways and housing, has tumbled 43 percent from its high, destroying
$748 billion in market value. Only Greece’s ASE Index (ASE) has fallen more in percentage terms.

Black Holes at China's Shadow Banks.
When I speak of cracks in China’s institutional foundation, I’m
thinking in large part of China’s banking system -- which as far as I
can tell, isn’t really a
banking system the way that we think of it.

Ringgit Falls Most in 3 Weeks, Bonds Drop on Fitch Outlook Cut. Malaysia’s
ringgit declined the most in three weeks and bonds extended losses
after Fitch Ratings cut the nation’s credit outlook to negative from
stable, citing rising debt levels and a lack of budgetary reform. The currency dropped to a three-year low and 10-year bond
yields climbed to the highest since April 2011 after Fitch said
in a statement yesterday that Malaysia’s public finances are its
“key rating weakness.” The shrinking current-account surplus
and $2.9 billion of sovereign debt maturing today raises the
risk of capital outflows, putting the ringgit on course for its
worst month in more than a year.

HTC Slumps After Forecasting Sales Drop. HTC Corp. (2498), Taiwan’s biggest smartphone maker, slumped to its lowest in almost eight years in Taipei trading after forecasting an eighth consecutive decline in quarterly sales amid intensifying competition. The stock dropped 6.7 percent to NT$159.5 as of 9:05 a.m., the lowest level since November 2005. Revenue will be as much as NT$60 billion ($2 billion) in the three months ending September, the Taoyuan, Taiwan-based company said in a statement yesterday. That missed the NT$72.7 billion average of 21 analysts’ estimates compiled by Bloomberg.

Rubber Pares Monthly Gain Ahead of U.S. Growth Data, Fed Meeting. Rubber pared the first monthly gain
in six ahead of U.S. economic growth data and a policy statement
by the Federal Reserve today. The contract for delivery in January fell as much as 2.1
percent to 238.7 yen a kilogram ($2,435 a metric ton) on the
Tokyo Commodity Exchange and was at 242.6 yen at 11:52 a.m.
Prices gained 2.7 percent this month, paring losses this year to
20 percent.

Gold Climbs as Investors Await Fed Statement; Silver Advances. Gold advanced as investors awaited
the conclusion of U.S. Federal Reserve policy makers’ meeting
today for signals on whether the Fed may start reducing its
unprecedented stimulus program in the coming months. Bullion for immediate delivery rose as much as 1 percent to
$1,339.74 an ounce, and was at $1,336.65 at 10:02 a.m. in
Singapore. Prices have advanced 8.3 percent in July, snapping a
run of three monthly losses and heading for the best gain since
January 2012.

Spain Weighs Home Demolitions as Wrecking Crews on Alert. The volume
of properties for sale, combined with an expected drop in the
population, will prevent the residential property market from recovering
anytime soon. As many as 2.27 million homes may either be on the market
already or in the
pipeline, including up to 400,000 that are being developed, RR
de Acuna estimates. Home prices have dropped about 35 percent since
their peak
in 2007, according to RR Acuna estimates based on home valuation
data, said Rodriguez de Acuna. Prices may keep falling for at
least a further five years, taking total declines from the top
of the market to the bottom to 50 percent, he said.

Iran May Reach Nuclear Breakout Ability by Middle of Next Year. Iran may achieve the “critical
capability” to process low-enriched uranium into fuel for a
nuclear weapon without detection by international inspectors by
mid-2014, according to a report by a research group. Iran would reach this capability by acting on plans to
install thousands of additional enrichment centrifuges at its
Natanz and Fordow sites, according to David Albright, a former
nuclear inspector, and Christina Walrond of the Washington-based
Institute for Science and International Security.

Afghan Army Needs U.S. Help After Next Year, Pentagon Reports. Afghanistan’s security forces can’t
go it alone after the planned departure of U.S. combat troops at
the end of next year, the Pentagon said in its latest assessment
of the war effort. “Substantial training, advising and assistance, including
financial support” will be needed to address “ongoing
shortages,” including the inability of Afghan security forces
to operate and sustain complex battlefield technologies, air
operations and logistics, according to the report issued
yesterday. It also cited a gap in fielding units to clear
roadside bombs, the primary killer of Afghan forces.

Half of Sleeping TSA Workers Get Little Punishment: GAO. The
U.S. Transportation Security Administration isn’t consistent in
disciplining workers accused of misconduct, penalizing some with little
evidence while not imposing minimum sanctions on others, an audit
concluded. Half of workers accused of sleeping on the job received
less than the lowest penalty called for by agency policies, the
Government Accountability Office said in a report released today. The
House Homeland Security Committee is holding a
hearing tomorrow on how the agency disciplines employees.

Wall Street Journal:

Summers Hedges His Doubts on Fed's Bond Buying. Potential Bernanke Successor Holds Nuanced Views on Monetary Policy.
Lawrence Summers, a leading candidate to be the next Federal Reserve
chairman, likely wouldn't beat a rapid retreat from the easy-money
policies pursued by
Ben Bernanke if he gets the job.
A close reading of Mr. Summers's
columns and speeches, as well as conversations with people familiar with
his thinking and a June interview with him, show that Mr. Summers has
been skeptical about the benefits of the Fed's huge bond-buying
programs, known as "quantitative easing," but that he also has said he
sees few harmful side effects stemming from them.

Banks Face More Suits Over Swaps. Lenders Accused of Anticompetitive Practices. Two financial institutions filed lawsuits alleging large banks have
had an unfair stranglehold on the $25 trillion credit-default-swaps
market, adding to a pile of complaints about antitrust violations in
derivatives. An affiliate of MF Global Holdings Ltd. filed a proposed class-action
lawsuit Monday in an Illinois federal court alleging 11 banks engaged
in anticompetitive practices, including blocking the company from
becoming a clearing broker for swaps.

Scott Gottlieb: How ObamaCare Hurts Patients. The 340B program was meant to help about 90 hospitals buy drugs to treat the poor. Now 1,675 hospitals qualify. President Obama promised to mend the failings in the American
health-care system, and yet for cancer treatment, ObamaCare is taking a
rotten feature of the old system and making it worse.

China national audit to focus on new debt: report. China's national audit of central and local government debt, announced
on Sunday, will focus on new borrowing, the 21st Century Business Herald
reported.An investigation by China's National Audit Office will cover debt taken
out since 2011, the newspaper said Wednesday, citing exclusive sources.
The audit will catalogue the amount, structure, source and purpose of
the borrowing and is due to be completed by October. The NAO will also try to get a handle on the multiplicity of channels
used by local governments to access capital, including high-cost
borrowing through trust companies and banks' wealth management products,
the paper said. Illegal borrowing by the lowest levels of the Chinese
government hierarchy, townships and villages, will also come under
scrutiny.

Official data to signal more pain for Chinese factories. China's closely-watched official manufacturing purchasing managers index
(PMI), due out on Thursday, is expected to show factory activity
contracted for the first time in 10 months as the world's second largest
economy suffers a deepening slowdown.

OpenTable(OPEN) Begins Testing Mobile Payments. OpenTable, the world’s largest online reservation service, lets users
book a restaurant reservation with its smartphone app or Web site. Now
the company is getting ready to take the next step and let diners pay
for the meal with its app, too.

Reuters:

Spain on the way back … to stagnation. Even if the economy only contracts by 0.1 percent, having shrunk by 0.5
percent in the first quarter, economists have warned that while the
slump may be coming to an end, sustainable growth is a long way off. The
central bank expects output to be flat over the next 12 months and says
the economy remained very sensitive to adverse shocks, particularly on
the fiscal side.

China underwhelms with salvo to slim bloated industry. China's
edict to
more than 1,900 companies to shut excess production capacity by
September is the latest effort to slim down bloated industries, but in
the key steel, aluminum and cement sectors the cuts are just a fraction
of their surpluses. Broader efforts, including credit curbs, raising environmental standards and energy efficiency will
help slow the expansion of these sectors, but Beijing's push towards
industry consolidation will be slow to materialize, analysts said.

Japan July manufacturing PMI shows growth at 4-month low. Japanese manufacturing activity
in July grew at the slowest pace in four months in a sign that firms are curbing production due to slowing growth in exports. The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 50.7 in July from 52.3 in June.

Carlyle prepares boom-era securities sale. Carlyle
Group is preparing a second European collateralised loan obligation in
as many months as it seeks to tap resurgent investor appetite for a
financial instrument widely shunned since the financial crisis. The US-based asset manager is speaking to investors about
issuing a CLO similar to the €350m one it issued in June, according to a
person familiar with the situation.

Yonhap News:

N. Korea warns joint S. Korea-U.S. military drill will fuel tensions. North
Korea warned Wednesday that a joint South Korea-U.S. military drill
scheduled for mid-August will once again fuel tensions on the Korean
Peninsula. The annual Ulchi Freedom Guardian (UFG) exercise, which
aims to improve the defensive posture of the two allies against
potential attacks by the North, is slated to take place in South Korea
next month.

Asahi:

Japan to Cut Budget Deficit by 8t Yen Over Next 2 Years. Japan
will cut budget deficit by 8t yen by FY 2015, assuming a proposed sales
tax increase is implemented as scheduled, without attribution. Cabinet
to present mid-term fiscal plan in early August. Govt plans to cut
budget deficit to 15t yen in FY 2015 from 23t yen in FY 2013.

China May Set Carbon Tax Rate Over 10 Yuan/Ton. China may set
carbon tax rate at more than 10 yuan per ton, with plan under discussion
by the National People's Congress, citing a person familiar with the
matter.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

BMW Denied in China Seen Signaling Outlook Dimming for Carmakers. Bayerische
Motoren Werke AG (BMW)’s failure to win government approval to expand a
factory in China is fueling concern global automakers could find it
increasingly difficult to win regulatory approval on projects in the
country. Shares of BMW partner Brilliance China Automotive Holdings
Ltd. (1114) fell the most in almost four weeks in Hong Kong yesterday
after China’s Ministry of Environmental Protection said it sent
back an application, citing inadequate wastewater analysis and
the plan’s failure to meet government anti-pollution targets.

China Iron-Pore Production Jumps 10.7% in June, Near Record.

Brazilian Real Falls to Four-Year Low, Stoking Inflation Concern.
Brazil’s real dropped to a four-year low, adding to concern
accelerating inflation will undermine efforts to stimulate Latin
America’s largest economy. Swap rates rose on speculation the central
bank will maintain the pace of increases in borrowing costs even as a
report showed inflation slowed. The real has tumbled 11 percent in the past three months, the biggest drop among 24 emerging-market dollar counterparts tracked
by Bloomberg. The depreciation pushes up the price of imports and
threatens to further fuel inflation, which helped spark nationwide
street protests last month. “The central bank seems to have a blank
check to combat inflation,” Daniel Cunha, the chief economist at XP
Investimentos in Sao Paulo, said in a telephone interview. “The
fight against inflation seems to have greater weight than
economic growth.”

What Happens If the BRICs Sink Like One? In the case of India and Brazil, I think the answer is “sad, with
regional implications.” Growth in those countries has pulled millions of
people out of dire poverty, but many remain. And solid economic growth
in any large country has regional spillover effects through migration
and trade. But these are still economies where agriculture plays
an outsized role. Brazil’s growth has been driven by agricultural
exports such as soy and beef, while India’s GDP is still measurably
affected by the monsoon, which drives crop yields. A growth slowdown in
an agricultural economy may play havoc with individual commodity prices,
but it doesn't have, say, the enormous impact on global manufacturing
networks that a Chinese slowdown would have.

Deutsche Bank(DB) to Cut Assets $332 Billion as Profit Slides. Deutsche
Bank AG (DBK), continental Europe’s biggest bank, said it will shrink
its balance sheet by 250 billion euros ($332 billion), joining Barclays
Plc (BARC) and UBS AG (UBSN) in seeking to comply with stricter capital
rules. Deutsche Bank will reduce leverage by changing the way it
accounts for derivatives and by winding down a 73 billion-euro portfolio
of assets, Chief Financial Officer Stefan Krause told investors on a
conference call today. Krause announced the plan after the bank said net
income slid 49 percent to 334 million euros, missing the average 767.6
million-euro estimate of nine analysts.

European Stocks Advance as EDF, Alcatel-Lucent Rally.
European stocks advanced as investors weighed corporate earnings from
Electricite de France SA to Barclays Plc and the Federal Reserve began a
two-day policy meeting. EDF, Europe’s biggest power generator, and
Alcatel-Lucent (ALU) SA, a French maker of phone equipment, jumped more
than 7 percent as profit beat analysts’ estimates. Barclays sank the
most in 13 months after announcing a rights offering and saying
income fell. K+S AG, Europe’s largest potash producer, plunged
24 percent as OAO Uralkali ended a deal that controlled supplies
of the fertilizer ingredient from the former Soviet Union. The Stoxx Europe 600 Index added 0.1 percent to 299.43 at
the close of trading, as two stocks rose for every one that
fell.

Crude Drops to Three-Week Low as U.S. Growth May Slow. WTI for September delivery declined $1.46, or 1.4 percent, to $103.09 a barrel at 12:57 p.m. on the New York Mercantile Exchange. It fell to $102.78 in intraday trading, the lowest price since July 9. The volume of all futures traded was 3.8
percent below the 100-day average for the time of day. Prices
are up 6.8 percent in July, set for a second monthly gain.

Fed Decision-Day Guide From QE Tapering Guidance to Dissents. Here’s what to look for when the Federal Open Market Committee releases a statement at 2 p.m. tomorrow
after a two-day meeting in Washington. Unlike last month, the
policy-making panel will not release economic forecasts, and Chairman
Ben S. Bernanke will not be briefing the press afterwards.

Achuthan Says U.S. Economy Has Faltered Since Last Recession. U.S.
economic growth has been
lacking since the last recession, said Lakshman Achuthan, the Economic
Cycle Research Institute co-founder who maintains that the U.S. reverted
to a slump last year. “Growth is not there,” Achuthan said, speaking on Bloomberg Television with Tom Keene and Sara Eisen. The section
of the population aged 35 to 54 “has lost almost 1 million
jobs since the recovery began,” he said. Achuthan today reiterated his view that a recession began
last year and that data will eventually show this. In a previous
interview with Bloomberg Television on March 7 he said he was
basing his opinion on the “stall speed” in gross domestic
income in 2012, and on the weakness in indicators such as output
and income.

Wall Street Journal:

Home Prices Jump, but Headwinds Build. Rising Mortgage Rates, Potential for More Supply Threaten Pace of Gains Shown in Two Indexes. Home prices during the first half of 2013 posted their largest gain
since the housing boom peaked seven years ago, but rising mortgage rates
and the potential for more supply could eventually slow the run-up. Nationally, home values rose by 5.8% in June from one year ago,
according to Zillow Inc., the real-estate website, the largest gain
since 2006. So far this year, prices are up 2.7%, the strongest
year-to-date gain in June since 2005.

Goodyear's(GT) Net More Than Doubles.
Goodyear Tire & Rubber Co.'s GT +9.45% second-quarter net income
more than doubled on higher profit in all of its regions, including
Europe where many auto-related companies continue to struggle. The
largest U.S.-based tire maker also slightly
raised its full-year outlook, now expecting operating profit on the
higher end of its forecast of $1.4 billion to $1.5 billion.

Gov't Knows Best? White House creates 'nudge squad' to shape behavior. The federal government is hiring what it calls a "Behavioral Insights
Team" that will look for ways to subtly influence people's behavior,
according to a document describing the program obtained by FoxNews.com.
Critics warn there could be unintended consequences to such policies,
while supporters say the team could make government and society more
efficient. While the program is still in its early stages, the document shows
the White House is already working on such projects with almost a dozen
federal departments and agencies including the Department of Health and
Human Services and the Department of Agriculture.

Appeals court rules against NYC soda ban. Another court ruling has taken the fizz out of New York City's ban on big, sugary sodas. A New York appeals court on Tuesday ruled that the city Board of
Health exceeded its legal authority and acted unconstitutionally when it
tried to put a size limit on soft drinks served in city restaurants.

CNBC:

Look out below! Work more, get less in Obamacare 'cliff'. Be careful you don't fall off the Obamacare "cliff" when the boss asks you to put in some overtime. Working
more could ultimately mean thousands of dollars less for you under a
quirk in the new health-care law going into effect this fall. This could
prompt some people to cut back on their hours to avoid losing money.
"Working more can actually leave you worse off," the price-comparison
site ValuePenguin.com notes in a new analysis. "It's sort of an absurd
scenario," said Jonathan Wu,
ValuePenguin.com's co-founder. "It's something for people to be aware
of."

Shares in fertilizer makers plunge on price shock. Russia's
Uralkali has dismantled one of the world's largest potash partnerships
by pulling out of a venture with its partner in Belarus, a move it
expects
will cause global prices to plunge by 25 percent.

Coach Inc(COH) sees weakness in North America; two more executives leave. Coach Inc on Tuesday again reported soft sales at its North American stores as it
continued to face tough competition for handbag shoppers, and the
leather goods maker announced the departures of two more executives.Shares of New York-based Coach, which is known for its Poppy handbags, fell 6.2 percent to $54.25 in premarket trading.

METALS-Copper falls to 3-week low on fears of gloomy China data. Copper slid to its weakest in nearly three weeks
on Tuesday as expectations of weak manufacturing data from top consumer China dimmed prospects for growth in metals demand. Benchmark copper on the London Metal Exchange (LME) lost 2.1 percent
to close at $6,735 a tonne, the lowest since July 10.

US biotech stocks ride wave of investor euphoria. Biotechnology
companies are raising money at the fastest rate since the dotcom boom,
underscoring the renewed appetite for one of Wall Street’s riskiest bets
despite the high chance that the investments will turn sour.

Telegraph:

Swedish warning. (graph) The
hard data is in. Sweden's GDP fell by 0.1pc in the second
quarter, astonishing everybody who relies on soft PMI confidence
surveys. Year-on-year growth has been just 0.6pc, half the level
expected, and Sweden is supposed to be a star performer in Europe. By the way, this is what Sweden's manufacturing PMI has been doing:

Echoing fears that
European policymakers remain in a state of cognitive dissonance –
recognizing the need for root-and-branch overhaul of peripheral banks,
but backtracking on joint liability plans – Christopher Flowers, the
legendary FIG investor who now runs the £2.3 billion ($3.5 billion)
private equity group JC Flowers, sounded the alarm over the negative
sovereign-bank feedback loop.
In a shot across the bows of market bulls, who cite the return of
capital flows to weaker eurozone states, Flowers issued a stark warning:
"There is a scenario where we have a Lehman-type event: we wake up some
Thursday and a big country is in trouble.
"And the ECB will have to decide to support banks x, y, z. And then the
ECB will, in fact, decide to own bank x, y, z.

Vedomosti:

Russia Has 70,000 Railcars Idled as Cargoes Drop. The country's
largest railcar operators asked Russian Railways to limit supply of
idled railcars making them available at certain stations only, citing
letter from operators.

The positions and strategies discussed on BETWEEN THE HEDGES are offered for entertainment purposes only and are in no way intended to serve as personal investing advice. Readers should not make any investment decision without first conducting their own thorough due diligence. Readers should assume the editor of this blog holds a position in any securities discussed, recommended or panned. While the information provided is obtained from sources believed to be reliable, its accuracy or completeness cannot be guaranteed, nor can this publication be, in anyway, considered liable for the investment performance of any securities or strategies discussed.